‘Work with competitors’

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Friday, August 22, 2014


“COOPETITION” is what business communities and government need, as part of the preparations for the full integration of the Association of Southeast Asian Nations (Asean) economies in 2015, an economist said.

Dr. Cielito Habito told the 23rd Visayas Area Business Conference yesterday that both the public and private sectors need to “team up, cluster and unite.” “Coopetition” is a play on the words cooperation and competition. Habito serves as the chief of party for the United States Agency for International Development (USAID) Trade Relations Assistance for Development Project.

“Let us not look at it (integration) with fear. Dec. 31, 2015 is not a day of reckoning but a target deadline for 100 percent compliance,” he said.

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The Philippines has completed 87 percent of the Asean blueprint commitment and is working on the remaining 13 percent in policy commitments.

Habito said he believes the Philippines is “now strongly positioned for AEC (the Asean Economic Community),” particularly mentioning Cebu and Mandaue City among those communities ready for the change.

He said the “essential yardsticks” that include price stability, jobs, and income continue to be robust.

Benefits outweigh costs

The average price increase from year 2010 to 20113 was at 3.6 percent, lower than the average price increase of 5.8 percent from 2004 to 2009.

The gross domestic product (GDP), which grew at 7.2 percent, was the fastest growing in Southeast Asia and third fastest in Asia, he added.

As for investments, the Philippines recorded an average annual growth of 10.6 percent from 2010 to 2013. Last year, annual investment growth was pegged at 11.7 percent.

This is a big jump from the zero percent average annual investment growth recorded from 2004 to 2009, Habito said.

“The AEC is more about complementation and less about competition. Overall benefits outweigh the cost,” Habito said.

Full integration calls for a single production base, a competitive economic region, an equitable economy and the region’s integration into the global economy.

Since January 2010, 99.6 percent of tariff lines have been brought down to zero.

With the Asean region recording a 600-million market base, Habito called on businesses, especially small and medium enterprises, to “strengthen and professionalize” their finances and business management.

“Wag magkanya-kanya (Don’t work in isolation), take advantage of the export market,” the economist said. If the demand for a product cannot be supplied by one local entrepreneur alone, he pointed out, he or she can work with local competitors to supply the export requirement.

Integration issues

Philippine Chamber of Commerce and Industry (PCCI) President Alfredo M. Yao noted that the chamber sees the integration in a “positive light” but also has to ensure that the country’s SMEs will not be left behind and will be provided with “support to participate effectively.”

Concerns related to the integration include “the high cost of power, inadequate infrastructure, conflicting laws, issues on taxation, and access to finance and technology.”

PCCI vice chairman Donald Dee, in his speech, cited the Department of Trade and Industry’s shared service facility (SSF) program as one of the moves initiated by the government to support SMEs.

Local support

Under the SSF program, DTI provides facilities and equipment to identified groups involved in entrepreneurship. In 2013, the agency announced that it would put up 800 SSFs nationwide using a P700-million fund.

Last week, DTI 7 turned over close to P1 million worth of equipment to farmers of Carcar City and the town of Sibonga in Cebu.

Dee also invited local business owners to attend the Philippine Business Conference and Expo in Manila in October this year, which will include market-matching activities.

As for Mandaue City, Mayor Jonas C. Cortes said the City is gearing up to further support SMEs, such as by identifying investment priority areas to guide potential investors. He said the central district of Mandaue will be for commercial enterprises, while the southern part will be for industrial establishments.

Published in the Sun.Star Cebu newspaper on August 23, 2014.

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